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"By effectively providing convenient, dependable and on-time services to our customers, we are efficiently growing revenue, driving operating leverage and positioning the company to be the leading provider of essential residential and commercial services."

MEMPHIS, Tenn.--(BUSINESS WIRE)--ServiceMaster Global Holdings, Inc. (NYSE: SERV), a leading provider of
essential residential and commercial services, today announced
preliminary unaudited first-quarter 2015 results. The company reported
first-quarter 2015 revenue of $571 million, an increase of 7 percent
compared to the same period in 2014. The increase in revenue was driven
by an acceleration in organic growth at American Home Shield, an
increase in sales of new services at Terminix, pricing increases and the
acquisition of Home Security of America, Inc. (“HSA”), which the company
acquired on February 28, 2014.

The company reported first-quarter 2015 net income of $28 million or
$0.20 per share versus a net loss of $113 million or $1.23 per share in
the same period in 2014. First quarter 2015 net income includes a loss
on extinguishment of debt of $13 million. The net loss in the
first-quarter 2014 includes a $48 million non-cash charge for the
impairment of software and a $95 million loss from discontinued
operations associated with goodwill and trade name impairment charges at
TruGreen, a subsidiary which the company spun-off on January 14, 2014.

The company reported first-quarter 2015 adjusted net income of $45
million, or $0.33 per share versus $23 million, or $0.25 per share, for
the same period in 2014. Earnings per share and other share data
contained in this release reflect the 136.1 million and 91.7 million
diluted share count for the first quarter ended March 31, 2015 and 2014,
respectively.

The company reported first-quarter 2015 Adjusted EBITDA of $133 million,
an increase of $18 million or 16 percent compared to the same period in
2014. The increase was primarily driven by the impact of higher revenue
and operating cost savings, partially offset by lower investment income
at AHS than during the first-quarter of 2014.

Rob Gillette, ServiceMaster’s chief executive officer, noted, “New
services at Terminix and strong organic growth at American Home Shield
drove revenue and profitability during the quarter.” Gillette said, “By
effectively providing convenient, dependable and on-time services to our
customers, we are efficiently growing revenue, driving operating
leverage and positioning the company to be the leading provider of
essential residential and commercial services.”

Preliminary Consolidated Performance

Three Months Ended March 31,

$ millions

2015

2014

B/(W)

Revenue

$

571

$

533

$

38

YoY growth

7.2

%

Gross Margin

268

245

23

% of revenue

46.9

%

46.0

%

0.9

pts

SG&A

(151)

(151)

—

% of revenue

26.4

%

28.4

%

2.0

pts

Income (Loss) from Continuing Operations before Income Taxes

45

(27)

72

% of revenue

7.8

%

(5.1)

%

12.9

pts

Income (Loss) from Continuing Operations

28

(18)

46

% of revenue

4.9

%

(3.4)

%

8.3

pts

Net Income (Loss)

28

(113)

141

% of revenue

4.9

%

(21.2)

%

26.1

pts

Adjusted Net Income(1)

45

23

22

% of revenue

7.9

%

4.3

%

3.6

pts

Adjusted EBITDA(2)

133

115

18

% of revenue

23.2

%

21.5

%

1.7

pts

Pre-Tax Unlevered Free Cash Flow(3)

146

111

35

Preliminary Information for Continuing Operations

Three Months Ended March 31, 2015

Revenue

Adjusted EBITDA

$ millions

2015

B/(W) vs. PY

2015

B/(W) vs. PY

Terminix

$

336

$

16

$

89

$

11

YoY growth / % of revenue

5.0

%

26.4

%

2.0

pts

American Home Shield

175

24

29

6

YoY growth / % of revenue

16.0

%

16.6

%

1.6

pts

Franchise Services Group

59

(1)

19

1

YoY growth / % of revenue

(1.9)

%

31.5

%

2.2

pts

Corporate(4)

1

(1)

(4)

—

Total

$

571

$

38

$

133

$

18

YoY growth / % of revenue

7.2

%

23.2

%

1.7

pts

A reconciliation of income from continuing operations to both adjusted
net income and Adjusted EBITDA, as well as a reconciliation of net cash
provided from operating activities from continuing operations to pre-tax
unlevered free cash flow, are set forth below in this press release.

Terminix

Terminix, which provides termite and pest control services to
residential and commercial customers and distributes pest control
products, reported a 5 percent revenue increase in the first-quarter of
2015 compared to the first-quarter of 2014. The revenue increase was
primarily driven by increased sales of new services and improved
pricing, partially offset by lower demand for traditional termite
services. Adjusted EBITDA increased 14 percent or $11 million versus
prior year, driven primarily by the flow-through effect of higher
revenue combined with operating efficiencies.

American Home Shield

American Home Shield, which provides home warranties for household
systems and appliances, reported a 16 percent revenue increase in the
first-quarter of 2015 compared to the first-quarter of 2014, driven by
the acquisition of HSA and organic growth. Adjusted EBITDA increased 28
percent or $6 million versus prior year, primarily reflecting the
flow-through effect of higher revenue and improved operating
efficiencies, partially offset by an increase in marketing and the
non-reoccurrence of prior year gains on investments.

Adjusted EBITDA was the same in the first-quarter of 2015 as in the
prior year.

Cash Flow

For the quarter ended March 31, 2015, net cash provided from operating
activities from continuing operations increased to $60 million from $21
million for the quarter ended March 31, 2014.

Pre-tax unlevered free cash flow(3) was $146 million for the
quarter ended March 31, 2015, compared to $111 million for the quarter
ended March 31, 2014.

Net cash used for financing activities from continuing operations was
$182 million for the quarter ended March 31, 2015. During the quarter,
the company redeemed $190 million of the 8% Senior Notes due 2020. As
part of the transaction, the company recorded in the first quarter of
2015 a $13 million loss on the extinguishment debt, of which $11 million
was a pre-payment premium on the 8% Senior Notes. For the quarter ended
March 31, 2014, net cash used for financing activities from continuing
operations was $43 million, largely consisting of a $35 million
contribution to TruGreen Holding Corporation as part of the spin-off
transaction.

Other Matters

On February 10, 2015, certain selling stockholders, including investment
funds sponsored by, or affiliated with, Clayton, Dubilier & Rice, LLC,
the company’s principal stockholder, sold 25 million shares of common
stock in a secondary offering. On February 13, 2015, the underwriters of
the secondary offering exercised their option to purchase an additional
3.75 million shares of common stock pursuant to the underwriting
agreement. The company did not receive any proceeds from the sale of the
aggregate 28.75 million shares of common stock by the selling
stockholders.

In the first quarter of 2015, the company recorded a net charge of $3
million in connection with unasserted civil claims related to an
incident at a resort in St. John in the U.S. Virgin Islands. The charge
of $3 million is an amount equal to the company’s insurance deductible
under its general liability insurance program. The range of any
potential criminal or other penalties or governmental fines or sanctions
is not currently known or reasonably estimable. The incident and the
associated criminal and governmental investigations were previously
disclosed on Form 8-K filed by the company with the U.S. Securities and
Exchange Commission on March 30, 2015.

On April 1, 2015, the company redeemed the remaining $200 million of the
8% Senior Notes due 2020. The company expects to record in the second
quarter of 2015 a $14 million loss on the extinguishment debt, of which
$12 million is a pre-payment premium on the 8% Senior Notes. To redeem
the 8% Senior Notes, the company used $39 million in balance sheet cash
and incurred incremental borrowings of $175 million under its term loan
facility to finance the remaining portion of the redemption.

Full-Year 2015 Outlook

The company maintains the outlook previously provided for the full-year
2015. Consistent with this outlook, the company anticipates that revenue
will be between $2,550 million and $2,590 million, a 4 percent to 5
percent increase compared to 2014. Adjusted EBITDA is anticipated to be
at least $610 million for the full-year 2015, an increase of
approximately 10 percent compared to 2014.

First-Quarter 2015 Earnings Conference Call

The company will discuss its first-quarter 2015 operating results during
a conference call at 8 a.m. central time today, April 28, 2015. To
participate on the conference call, interested parties should call
800.706.9302 (or international participants, 303.223.2688).
Additionally, the conference call will be available via webcast. A slide
presentation highlighting the company’s results and key performance
indicators will also be available. To participate via webcast and view
the slide presentation, visit the company’s investor relations home
page at www.servicemaster.com.

The call will be available for replay until May 28, 2015. To access the
replay of this call, please call 800.633.8284 and enter reservation
number 21766731 (international participants: 402.977.9140, reservation
number 21766731). Or you can review the webcast on the company’s investor
relations home page.

About ServiceMaster

ServiceMaster Global Holdings, Inc. is a leading provider of essential
residential and commercial services, operating through an extensive
service network of more than 8,000 company-owned locations and franchise
and license agreements. The company’s portfolio of well-recognized
brands includes Terminix (termite and pest control), American Home
Shield (home warranties), ServiceMaster Restore (disaster restoration),
ServiceMaster Clean (janitorial), Merry Maids (residential cleaning),
Furniture Medic (furniture repair) and AmeriSpec (home inspections). The
company is headquartered in Memphis, Tenn. Go to www.servicemaster.com
for more information about ServiceMaster or follow the company at
twitter.com/ServiceMaster or facebook.com/TheServiceMasterCo.

Information Regarding Forward-Looking Statements

This press release contains forward-looking statements and cautionary
statements. Some of the forward-looking statements can be identified by
the use of forward-looking terms such as “believes,” “expects,” “may,”
“will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,”
“projects,” “is optimistic,” “intends,” “plans,” “estimates,”
“anticipates” or other comparable terms. Forward-looking statements are
subject to known and unknown risks and uncertainties, many of which may
be beyond our control, including, without limitation, the risks and
uncertainties discussed in the “Risk Factors” and “Information Regarding
Forward-Looking Statements” sections in the company’s reports filed with
the U.S. Securities and Exchange Commission. We caution you that
forward-looking statements are not guarantees of future performance or
outcomes and that actual performance and outcomes, including, without
limitation, our actual results of operations, financial condition and
liquidity, and the development of the market segments in which we
operate, may differ materially from those made in or suggested by the
forward-looking statements contained in this press release.

Additional factors that could cause actual results and outcomes to
differ from those reflected in forward-looking statements include,
without limitation, the effects of our substantial indebtedness; changes
in interest rates, because a significant portion of our indebtedness
bears interest at variable rates; lawsuits, enforcement actions and
other claims by third parties or governmental authorities; compliance
with, or violation of environmental health and safety laws and
regulations; weakening general economic conditions; weather conditions
and seasonality; the success of our business strategies, and costs
associated with, restructuring initiatives. The company assumes no
obligation to update the information contained herein, which speaks only
as of the date hereof.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, which
are not measures of financial condition or profitability. Non-GAAP
measures should not be considered as an alternative to GAAP financial
measures. Non-GAAP measures may not be calculated or comparable to
similarly titled measures used by other companies. See non-GAAP
reconciliations below in this press release for a reconciliation of
these measures to the most directly comparable GAAP financial measures.
Adjusted EBITDA, adjusted net income and pre-tax unlevered free cash
flow are not measurements of the company’s financial performance under
GAAP and should not be considered as an alternative to net income or any
other performance measures derived in accordance with GAAP or as an
alternative to net cash provided by operating activities or any other
measures of the company’s cash flow or liquidity. We believe these
non-GAAP financial measures are useful for investors, analysts and other
interested parties as it facilitates company-to-company operating and
financial condition performance comparisons by excluding potential
differences caused by variations in capital structures, taxation, the
age and book depreciation of facilities and equipment, restructuring
initiatives, consulting agreements and equity-based, long-term incentive
plans.

(1)Adjusted net income is defined by the company as income (loss)
from continuing operations before: amortization expense;
impairment of software and other related costs; consulting
agreement termination fees; restructuring charges; management and
consulting fees; loss on extinguishment of debt; and the tax
impact of all of the aforementioned adjustments. The company’s
definition of adjusted net income may not be comparable to
similarly titled measures of other companies.

(2)Adjusted EBITDA is defined as income (loss) from continuing
operations before: depreciation and amortization expense; non-cash
impairment of software and other related costs; non-cash stock-based
compensation expense; restructuring charges; management and
consulting fees; consulting agreement termination fees; provision
(benefit) for income taxes; loss on extinguishment of debt; interest
expense; and other non-operating expenses. The company’s definition
of Adjusted EBITDA may not be comparable to similarly titled
measures of other companies.

The table below presents selected operating metrics related to renewable
customer counts and customer retention for our Terminix and American
Home Shield segments.

As of March 31,

2015

2014

Terminix—

Reduction in Pest Control Customers

(0.4)

%

(1.8)

%

Pest Control Customer Retention Rate

79.2

%

79.1

%

Reduction in Termite Customers

(2.0)

%

(2.6)

%

Termite Customer Retention Rate

84.7

%

84.9

%

American Home Shield—

Growth in Home Warranties(1)

6.2

%

10.3

%

Customer Retention Rate(1)

74.9

%

75.9

%

(1) As of March 31, 2014, excluding the HSA accounts acquired on
February 28, 2014, the growth in home warranties was one percent,
and, excluding all HSA accounts, the customer retention rate for
our American Home Shield segment was 74 percent.

Terminix Segment

Revenue by service line is as follows:

Three Months Ended

% of

March 31,

Revenue

(In millions)

2015

2014

2015

Pest Control

$

184

$

176

55

%

Termite and Other Services

141

132

42

%

Other

11

12

3

%

Total revenue

$

336

$

320

100

%

Termite renewal revenue comprised 56 percent and 60 percent of total
revenue from Termite and Other Services for the three months ended
March 31, 2015 and 2014, respectively.